What happens in sc if you can't pay your credit card debt?

Answer 1

This is a general answer, so you will need to look to SC law for specifics on certain points.

Defaulted credit card debt faces the issuer with four options: sit, settle, sell or sue. The first option is only a temporary one for most issuers because banking regulations will make them dispose of their defaulted debt to junk debt buyers. The sue option will only be pursued by an original creditor if your financial picture (as disclosed by checking your credit report and doing a public records search to see what kind of assets you have) seems good enough. Original creditors typically won't settle for a lot less than 50%.

One option is credit counseling, essentially a chapter 13 plan administered by a nonprofit company rather than by a bankruptcy court (see below for what that's like). There are also "debt settlement" companies but they are typically scammy and do not improve your position vis-a-vis what you could do for yourself if you got a little education. They take your money and nothing good happens for you.

So the most probable outcome if you really can't pay and don't have a lot of assets that wouldn't be exempt in bankruptcy in your state or a job that can be garnished (and in many states heads of household can't be garnished) is that the debt will be sold to a large JDB, and assuming they don't find you suitworthy or settle with you, they will likely sell it down the debt river to a somewhat smaller and more regional JDB in a daisy chain that can be up to about four links long, finally coming to rest with one of two types of collectors: the extremely abusive "Buffalo"-school collector or the JDB that is an arm of a collections attorney's office. The former barks, the latter bites.

At some point, if your financial picture becomes bad enough, you may choose Chapter 7 bankruptcy to slough the debt, or you may be forced into a Chapter 13 if your income is high enough. Chapter 13 will require repayment over 3-5 years of at least a portion of the debt. Also, Chapter 13 plans are onerous and difficult to complete--and if you fall out of them the creditors will come at you all the harder.

However, many consumer successfully take themselves through "informal bankruptcy" by addressing issues as they come along and not using the BK courts. In time, the statute of limitations expires on many creditor claims, while other creditors can be fended off (and even profited from) using the FDCPA and FCRA as shield and sword.